Although crude futures have rallied to almost break-even and most of the major earnings reports released so far aren’t sharply negative in terms of those company’s macro-economic guidance, shares of Transenterix Inc (NYSEMKT:TRXC), Sarepta Therapeutics Inc (NASDAQ:SRPT), Ericsson (ADR) (NASDAQ:ERIC), Independence Contract Drilling Inc (NYSE:ICD), and Natural Grocers by Vitamin Cottage Inc (NYSE:NGVC) are significantly lower today. Let’s find out why traders are selling off these stocks and analyze relevant hedge fund sentiment towards each of them.
Through extensive research that covered portfolios of several hundred large investors between 1999 and 2012, we determined that following the small-cap stocks that large money managers are collectively bullish on, can generate monthly returns nearly 1.0 percentage points above the market (see the details here).
Transenterix Sharply Lower on Response from the FDA
Transenterix Inc (NYSEMKT:TRXC) shares have more than halved after the FDA notified it on April 19 that it had determined that the company’s SurgiBot System does not meet the criteria for substantial equivalence based on the information and data submitted to it in TransEnterix’s 510(k) submission. CEO Todd Pope discussed the FDA’s decision in a press release:
“The FDA’s decision is extremely disappointing. We are in the process of reviewing all aspects of the FDA’s communication. We will work to complete this review, and will provide an update on the regulatory strategy for the SurgiBot System together with our first quarter 2016 financial and operating results during our quarterly conference call on May 10, 2016.”
SurgiBot would allow surgeons to be in a sterile field when operating. The number of funds that we track which held shares of Transenterix Inc (NYSEMKT:TRXC) fell by three quarter-over-quarter to seven by the end of December.
Sarepta Down on Briefing Material Release
Sarepta Therapeutics Inc (NASDAQ:SRPT) is 46% lower in afternoon trading after the briefing doc over eteplirsen, the company’s Duchenne muscular dystrophy candidate, was published. For those scientifically inclined traders, the briefing document can be viewed at the FDA’s website. The doc highlights problems over the company’s Study 201/202 trial, which might render the study’s efficacy conclusion invalid. 17 top funds owned almost one-quarter of Sarepta Therapeutics Inc (NASDAQ:SRPT)’s float at the end of 2015.
On the next page we see what’s happening with Ericsson (ADR), Independence Contract Drilling Inc, and Natural Grocers by Vitamin Cottage Inc.